Shasta County Market Update - November 2021
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From the Desk Of Josh Barker
The month of October proved to be a pivotal month for Shasta County Real Estate. It appears that the market has formally transitioned from a pandemic related market to a more traditional economic based market. The number of home sales decreased sharply in October while inventory continues to rise. The rental market continues to remain strong while builders struggle to get supplies to build new multi family units. This month we will discuss some of the hottest topics trending now in our local market. If you have any additional questions please feel free to contact us at any time at our office at 530-222-3800.
MARKET UPDATE FOR NOVEMBER 2021
Home Inventory Continues to Rise
Home Inventory Continues To Rise finishing October with 677 dwellings for sale, compared to 699 dwellings for sale at the end of October of last year. The growth in home inventory has largely been the result of fewer home sales over the past several months combined with a small increase in new listings coming to the market.
Home Sales Decrease Sharply
Home Sales Decreased Sharply in October finishing at 249 closed down 28% compared to October of last year. The sharp decrease in sales is largely a reflection of the market continuing to transform from a pandemic related market to a more balanced market. Sales peaked in June of this year with a whopping 367 closed which now appears to be the peak in the market for the year.
The Average Home Selling Price
The average home selling price finished at $389,272 down 8% compared to June of this year. The decrease in the average sales price was anticipated as fewer out of town buyers purchased in our local market recently.
Interest Rates Continue to Remain Low
Interest Rates Continue To Remain Low averaging 3.5% for a 30 year fixed mortgage. Mortgage rates are projected to inch higher as inflation begins to pay its toll on mortgage bonds. Interest rates are projected to increase to 3.75% by the 3rd quarter of 2022. For every 1% the mortgage rate increases, home buyer purchasing power decreases by 10%.
The Rental Market
The Rental Market continues to perform exceptionally well for investors. The vacancy rate has remained extremely low and rent rates have continued to climb. There have been several larger scale multi family developments under development in west Redding that are welcome additions to the much needed housing supply. Cost of rental housing is expected to climb as inflation pays its toll on operation costs combined with higher wages for tenants. Bad news for those on fixed incomes in rental situations.
The California Foreclosure Moratorium
The California Foreclosure Moratorium expired July 31, 2021 providing a path for lenders to foreclose on delinquent mortgages in accordance with FHA guidelines. This policy change is beginning to work its way through the market as banks sort through forbearance policy and work with homeowners to restructure loans when possible. Unfortunately, many homeowners in forbearance are significantly delinquent and loan restructuring could prove to be challenging. It is estimated that over two thousand local Shasta County homeowners are behind on their mortgages and will be making some challenging decisions in the coming months. The options in these situations are slim: catch up the mortgage, sell, restructure the loan, or foreclose/short sale. Many of these types of properties are expected to reach the market for sale in the coming months.
The Eviction Moratorium
The Eviction Moratorium ended September 30, 2021. This policy change has provided some additional options for landlords that either were struggling to collect rent or desired to sell but were not able to do so due to the moratorium. It is projected that there will be a noticeable increase in rental properties coming to the market for sale in the coming months.
Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800
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Make it a great November!
P.S. You can view all of our past real estate market updates by visiting www.reddinghomes.com/blog